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The cabinet member for development and neighbourhoods expressed his "deep disappointment" on learning that perhaps many hundreds of bed spaces had disappeared from the Claverton Down campus.

The University of Bath has grown significantly in the past decade

"The university after all ‘rent’ the campus area on a ‘peppercorn’ rent, something I personally believe needs to be revisited in the difficult financial situation we find ourselves in," he wrote in a letter to the Chronicle.

"Every time we lose a family house to a student HMO or an office building converted to student accommodation, the council lose significant revenue in council tax and business rates – costing many millions of pounds."

The university would have to agree to any change in the terms of the 999-lease contract it signed in 1971.

What is peppercorn rent?

Token or nominal rent

The University of Bath hands the council a single peppercorn each year by way of rent for its Claverton Down site

It is handed over in an inscribed silver box at a ceremonial dinner

It has been done this way since 1971, when the university was signed a 999-year lease on the Claverton Down site

The first payment included six extra peppercorns, as back rent since the land was handed to the university by the City of Bath

A spokesman for the university said: “We take the views of all our local stakeholders, including councillors, very seriously and we are committed to working with them to resolve any issues."

He said the university has spent more than £100 million since 2000, adding 1,567 student beds to the campus, bringing the total number to 3,250.

It opened a £43 million, 708-bedroom student complex in 2015 and plans to open a 293-bed block next year, he said.

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Bath and North East Somerset Council is investigating whether the university gained permission to change the use of Wessex House after councillor Will Sandry (Liberal Democrat, Oldfield) noticed the tower block at the Claverton Down campus was now used as office space.

The university has said it is cooperating with the council over "an historical planning matter dating from the 1990s".

Wessex House is at the University of Bath's Claverton Down campus

Mr Sandry backed Mr Goodman's call for a review of the university's peppercorn rent today, saying the wealthy institution currently "has its cake and it eats it".

"They operate as a business, get a multi-million pound government grant and have all the benefits of being a charity. This means they receive a large discount on business rates," Mr Sandry said.

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The university was given the site on a 999-year lease when the city council was "well off", he added.

"Now B&NES has a revenue shortfall of £8 million and is being forced to cut public services and make people redundant.

"The time is right for the university to review its current contributions to the city and its social impact, particularly with respect to housing."

Councillor Bob Goodman (Image: paul@paulgillisphoto.com)

The University of Bath says it employs 3,000 people, adding almost £300 million to Bath and North East Somerset’s GDP, and its students spent more than 9,600 hours working for local charities and community projects last year, raising more than £132,000.

Its spokesman said: “We take seriously our role as good neighbours here in Bath."

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The potential loss of bed spaces on campus will be considered during the consultation on the council’s new local plan, he said.

Mr Goodman said: "I, together with [council leader] Tim Warren have met the university leadership several times over the recent weeks, both to express our deep concerns, but also looking to the university to accept their obligation to the city and the wider region.

"The university have difficult decisions to make over the coming months but I will endeavour to work with them, representing the undoubted concerns that the residents of Bath have.

"The university must now work to regain the trust that they have clearly lost."

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Bath's MP has congratulated Mr Sandry for bringing the potential loss of student flats on campus to the attention of the council and backed Mr Goodman's call for an end to the university's peppercorn rent.

Wera Hobhouse said: "Once again, we are talking about the poor decisions of senior management instead of the achievements of the university."